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Xerox accountants are squeaky clean

But they don't understand GAAP rules

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Good news for Xerox creditors and shareholders. The bluechip-to-pauper imaging biz has not been cooking the books.

CEO Paul Allaire reports: "After rigorous reviews of Xerox's accounting, no fictitious transactions were found and the company's liquidity is not impacted."

However, Xerox accountants have got their knickers in a twist over "certain accounting practices including some that involve complex accounting issues, which it had previously believed to comply with generally accepted accounting principles (GAAP), in fact, misapplied GAAP," Xerox announces.

Add to this, adjustments the company's previously announced write-off to cover mistakes made by its Mexican subsidiary and the effect is a "cumulative reduction of Common Shareholders Equity and Consolidated Tangible Net Worth of $137 million and $76 million, respectively, as of Dec. 31, 2000".

This does not effect the company's liquidity and it now has a pukka set of restated accounts. Cash in the bank at the end of Q1 was $2 billion. It still owes billions.

Xerox, one of the world's biggest and best-known companies, has got itself into a bit of a financial pickle lately. Following a botch sales reorganisation, the company dug itself an enormous debt pit; now it has to sell everything not nailed to the floor to keep the bailiffs from the door. ®

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